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An Overview of Smart Grid Issues


Oregon Public Utility Commission
Smart Grid Workshop
September 9, 2009
Roger Levy, Lead Consultant
Smart Grid Technical Advisory Project
Charles Goldman, Program Manager
Electricity Markets and Policy Group
Lawrence Berkeley National Laboratory

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Smart Grid Technical Advisory Project

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Discussion Outline - Overview

What is Smart Grid ?


A. Define Smart Grid
a) Enable consumers
b) Automation
c) Alternatives Renewables
B. Establish a vision
a) Who is the customer
b) Problems to resolve
c) Costs and Benefits
d) Where do you start

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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory

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A. Define Smart Grid


Smart Grid is System Integration
The Smart Grid is a system of information and
communication applications integrated with electric
generation, transmission, distribution, and end use
technologies which will :
Promote
Customer
Choice
Improve
Reliability
Integrate
Renewables

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[1] enable consumers to manage their usage and chose the most
economically efficient offering, while
[2] use automation and alternative resources to maintain delivery
system reliability and stability
[3] utilize the most environmentally gentle renewable, storage, and
generation alternatives.

Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory

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A. Define Smart Grid

Bulk Power
Generation

Bulk Power
Transmission

Power
Distribution

Customer
Devices

Power Delivery System

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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory

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A. Define Smart Grid


1. Bulk Power

2. Distribution

3. Load

Technology
Alternative Generation, Storage, Sensors, and Controllers
Customer Authorized Usage and Billing Information

Generation
Alternatives

Generation
Alternatives

Generation
Alternatives
Sensors

Sensors

Bulk Power
Generation

Bulk Power
Transmission

Sensors

Power
Distribution

Customer
Devices

Smart
Appliances

Power Delivery System

Interval readings, voltage, outage and other information


Price, Reliability, Event Signals, Historical Usage, Alerts, Other Information

Information Systems

Utility
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Customer

Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory

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A. Define Smart Grid Residential Micro Grid

Distribution primary (13.2 kV)

Distribution Transformer

An efficient and reliable micro-grid


doesnt need to be large or overly
complex.

Secondary (120/240 V)
Power to Six Homes

Isolating Device

House 1

Fuel Cell, Power


conditioning, control
and Storage Equipment

House 2

Heat to Homes

Power System
Secondary
(120/240 V)

Isolating
Device

Utility System
Primary (13.2 kV)

Utility System
Interface &
Controller

This could be several homes or


several hundred homes the
generation & storage would simply
be scaled to accommodate the load.
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House 3

Distribution
Transformer

House 4

50 KVA
Inverter

(Synchronization, fault
protection, islanding
detection, etc.)

House 5

House 6

DC Bus

Fuel
Cell

Thermal
Storage

Charge
Regulator

Energy
Storage

Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory

Heat
Distribution

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A. Define Smart Grid


Claimed Societal Benefits

Attribute

Dramatic reduction in tailpipe emissions

1-6

Reduction in petroleum imports of >50%

1-5

Reduction in peak loads lowering prices for consumers

Improved grid reliability

4-6

Increased grid security

4-6

Positive environmental impact

1-7

Enable new products, services and competitive retail markets

Anticipate and respond to system disturbances (self-heal)

4-6

Perform continuous self-assessment, respond faster by


supplementing human operators.

4-6

10

Operate resiliently against attack and be less vulnerable to


natural disaster

4-6

1. PHEVs 2. Advanced Metering


5. Automation 6. Expert Systems

Realistic ?

2, 3, 5

3. Dynamic Rates 4. Sensing


7. New Technology

Sources: Industry presentations and publications, see Slide #9.

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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory

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A. Define Smart Grid


Claimed Consumer Benefits

Attribute

Equivalent of $1.00 per gallon for gasoline

Provide prices and opportunity to buy when KWh prices are low
and sell when high

Home back-up power and mobile resource

Protecting against power losses and avoiding costly interruptions


and spoilage

2-7

Reducing the cost of electricity during peak power periods,

2-3

Customer choice from products to services

2, 3

Enhanced system reliability

2, 3

Enable active participation by consumers

power quality at different prices

1
2-7
1, 2-7

2, 3, 5, 7
2, 3, 5

10 Consumers access to information, control and options that allow


them to better manage energy and environmental costs
1. PHEVs 2. Advanced Metering
5. Automation 6. Expert Systems

Realistic ?

2, 3, 5, 7

3. Dynamic Rates 4. Sensing


7. New Technology

Sources: Industry presentations and publications, see Slide #9.

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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory

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A. Define Smart Grid


Claimed Utility System Benefits
1 Minimizing energy transmission losses

Attribute

2 Improving the efficiency of the electricity grid.

2-7

3 Increased efficiency of power delivery

2-7

4 Extended asset life

5 Seamlessly integrate generation and storage options


6 Operate efficiently to improve load factors, lower system
losses, and improve maintenance.
7 Grid operators have new resource options to provide energy,
capacity and ancillary services
1. PHEVs 2. Advanced Metering
5. Automation 6. Expert Systems

Realistic ?

[2,3,5] [4-7]
[2,3,5] [4-7]
[2,3,5] [4-7]

3. Dynamic Rates 4. Sensing


7. New Technology

Sources
1. The Smart Grid Benefits and Challenges, EEI Annual Convention, J.Miller Modern Grid Strategy Team, June 16, 2008
2. What will the Smart Grid Look Like ?, A Vision for the Smart Grid., DOE Office of Electricity Delivery and Energy Reliability, June 2008.
3. Miscellaneous public reports, press releases, presentations, and private sources.

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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory

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B. Vision of smart grid ?

1. Which customer(s) are you trying to serve: end-user


(rate payer) or the utility ?
2. What problem(s) are you trying to solve: manage future
costs, improve reliability, or integrate renewables ?
3. How is the Smart Grid different from what youve
already been doing ?
4. What are the smart grid costs and benefits?
5. Where do you start and what information do you need to
proceed: [1] Pilot programs or [2] Transition Plan ?

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Discussion Outline Key Issues

Key Smart Grid Regulatory Issues ?


1. Metering
2. Rates
a) Rate Design
b) Demand Response
c) Empowering the Customer
3. Reliability
4. Pilots or Transition Plans
5. Standards

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1. Metering

Key Issues ?
1. System integration vs. hardware integration
a) Advanced meters vs. Smart meters ?
b) What is the role of the HAN?
2. Establishing a business case [costs and benefits]
3. Targeted vs. system-wide implementation
4. Security and privacy who owns the data ?
5. Utility vs. the regulatory / customer use case
a) utility programs or open markets
b) Customer vs. utility control strategies
6. Standards Communication and hardware vs. data models.

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1. Metering: Two Fundamental Choices


Register Based Meters

Programmable Meters

1
Standard kWh
Electromechanical

kWh Cumulative

2
Remote Metering
[AMR]

Advanced Metering
Infrastructure [AMI]

kWh Cumulative
or TOU

kW Interval

kW Interval

Communication
Network

Enhanced
Communication Network

Smart Metering

HAN Gateway

Remote Service Switch


[connect / disconnect]

Meter Data
Management

Enhanced Meter Data


Management

Back Office Systems

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1. Metering: Two Fundamental Choices


Metering

Advanced

Metering System

Smart
Interval Recording

Tradeoffs - Issues
none

Primary Function

Interval Recording

Communications Capability

Network, two-way

Network, two-way into


customer premise

Focus on Meter Network


Reach into customer premise

Remotely Configurable
Demand Limit ConnectDisconnect Service Switch

A separate piece of
equipment

Integrated

Hardware Integration

Home Area Network Gateway

Separate system or
piece of equipment

Partially Integrated

Partial Hardware Integration

$70-$150

$130-$250

Cost, Depreciation,
Obsolescence

Interval kWh

Interval kWh
Customer device status

Rate Forms Supported

Flat, Tiered, TOU,


Dynamic

Flat, Tiered, TOU,


Dynamic

none

Support for Usage Displays

Remote Access
Separate Service

Integrated Plus Separate


Service

Thru the Meter

Obsolescence Ranking

Low to Moderate

Moderate to Uncertain

Increased Risk

Open

Gate Keeper Potential

May Limit Open Market

Cost Range per Meter


[excludes customer devices]
Data Collection

Support for Market Based Devices


and Services

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Smart Grid Technical Advisory Project, Lawrence Berkeley National Laboratory

More complex data


Security and Privacy

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2. Rates and Pricing

Rate designs and pricing are the integrating link


between the physical utility transmissiondistribution system and customer
Rate designs influence the efficiency, demand
response, and renewable potential .

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2. Rates [Pricing] - Issues

Customer Acceptance, Bill Impacts

Dynamic Pricing

Default or Voluntary
Integrated Incentives

Customer Understanding

Rate Design
Simplification

Facilitate Dispatchable DR
Open vs. Closed Market

Wholesale Retail
Integration

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Time Differentiated Fixed Costs


Reliability vs. Congestion DR

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2. Rates and Pricing - Tradeoffs


a

f. Cumulative
Metering

Static

Interval metering provides data to support all rate forms.


Communication supports dynamic rate, outage
management, and customer information options.

Dynamic rates (CPP, RTP) reflect system costs and


support dispatchable economic and reliability options.

Static rates do not reflect system costs or performance


based rates / incentives.

Rate Form

TOU, Flat,
Tiered

bb. Dynamic

h
DR limited to:
Utility programs
Targeted end-uses
Voluntary participation
Participation payments
Utility owned equipment
Utility control strategies

Interval &
Communication

Voluntary,
opt-in

Rate
Participation

c
Default,
opt-out

i
Utility

Who
Controls
DR

Direct Control

d
d Customer

j
Limited Market
Utility
Specifies
Technology

Expanded Direct
Control

Technology
Guidance

e Open Market
Customer
Specifies
Technology

Default, opt-out rates create a market for DR.


EE and DR implicit conditions of service for all customers
DR ubiquitous system wide
Expands and creates a market for customer ownership
and competitive equipment providers.

Voluntary, opt-in rates restrict the creation of open


markets for DR and can significantly increase
transaction costs for utility or ISO/RT programs.
Limits ubiquity and value of DR.
Customer choice opens the market for competitive
non-utility DR suppliers and service providers
Direct control disincents customer ownership and
restricts competitive equipment and service providers
Customer value establishes technology options
Regulators establish: (1) Need for subsidies to
address market barriers, (2) Data models - to provide
interoperability, and (3) Data ownership to address
security and privacy
Utility establishes technology, value, and protocols.

Price Response

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2. Rates and Pricing Demand Response


Under some utility demand response programs, customers often can participate in
only one option at a time.

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2. Rates and Pricing Demand Response


Static Pricing
Flat -Tiered

Time of Use

Dynamic Pricing
Critical Peak Pricing

Real Time Pricing

Rate Design

System and
Customer
Capability to
Respond

Metering and
Communication
Needs

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3. Reliability

What are the Objectives ?


1. Reduce the Frequency of outages ?
2. Reduce Outage Duration ?
3. Contain the Magnitude / Scope of outages ?
4. Improve Customer Notification ?
5. Reduce Unserved kWh ?
6. Reduce Customer Outage Costs ?
7. Reduce the Outage Damage Function ?
8. Improve Reliability Indices ?

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3. Reliability
Defining and Measuring Reliability
 There is no consistent definition, no universally applied industry standard
for defining and reporting reliability [ outages ].
 Major and Sustained events dont capture power quality (sags and
surges) or momentary outages.
 The value inherent in outage management is the reduction of the
customer outage cost, which is a function of multiple variables
including frequency, duration and customer type.
Clarify Objectives
 What is the reliability objective (frequency, duration, cost)?
 Is there more than one solution ?
 Where in the system will reliability investments have the greatest value ?
 How will you determine if reliability investments have been effective ?
 Should you consider standardizing reporting criteria IEEE 1366-2003 ?

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4. Pilots or Transition

Pilot Programs considered experiments for testing or gauging shortterm customer issues, rates, incentives, or technology options that may or
may not lead to deployment.
Transition Programs - staged implementations or core deployments that
begins with a base system and plan for systematic testing, acceptance
and expansion with additional components over time.
1. What do you know ?
2. What are you trying to learn or test ?
a) Customer acceptance
b) Technology / Engineering Performance
c) Market / system operation

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4. Pilots or Transition Plans

Attributes
Objective

Pilots

Transition Plans

Test and Evaluate

Systematic Implementation

Scope

1. Tech evaluation
2. Customer acceptance
3. Cost effectiveness

Sampling

Yes focus on representation

No focus on operational
integration

Restricted avoid bias

Required manage response

< 2 years

5 or more years

No separate systems

Yes integration objectives

Separate systems

Integrated systems

Regulatory Approach

Voluntary participation

Default participation or opt-out

Equipment Ownership

Utility

Utility or customer

Restricted

Open

Customer Education
Duration
Back Office Integration
System Operations

Customer Choice

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1. Tech implementation
2. Customer education
3. Operational effectiveness

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5. Standards

Key Issues ?
1. Interoperability
2. Obsolescence
3. Where are standards needed?
4. Key challenges?

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5. Standards: Interoperability and Data Models

Data
Model

Interoperability

Utility Programs
o
o
o
o

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Vertically Integrated
Utility owns equipment
Utility installs / maintains
Utility controls

Open Market
o
o
o
o
o

Horizontally Integrated
Customer owns equipment
Third party installation
Customer / Third party maintains
Customer controls

Control
Signals

Price, Event
Signals

Interoperability is a
regulatory issue.

Interoperability is a
market issue.

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5. Standards: Interoperability and Data Models


The OpenADR standard outlines specific communication models that use the Internet to
send DR signals to end-use customer systems. The standard, initially developed for
commercial and industrial applications, may be leveraged in residential settings to
reduce cost, promote interoperability among DR technologies and allow utilities and
energy providers to better manage pricing and critical load issues while actively
engaging their consumers.*

Utility
LSE

Demand
Response
Event and
Price Server

Price
[Reliability and
Event Signals]

Receiver

Data
Model

Rate Design

Customer
Owned
Automated
Controls
[EMS, PCT, HA]

Tendril Achieves First Open ADR Compliant Platform, January 29, 2009, http://www.tendrilinc.com/2009/01/tendril-achieves-firstopen-adr-compliant-platform-2/

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